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How Much Money Can You Save with a Balance Transfer?
Getting out of debt without ruining your credit score can be a very expensive process. However, there is a tried and true method savvy credit card users have been taking advantage of for years that can save you thousands & sharply reduce the time it takes to get out of debt. Follow this pair of simple steps to start making a debt free life a reality.
Step 1: Stop Paying Interest on Your Credit Card Debt Immediately
This may sound like the hard part, but it is far from it. In fact, you can get this process started in 5 minutes. How? With a 0% intro APR balance transfer.
A 0% intro APR balance transfer is a promotion many credit card companies offer to new customers to gain their business. These 0% promotions generally last for 6 to 12 months, though some offers are 15 months or longer. If you apply and are approved for one of these offers, you can transfer your high interest credit card debt to the new card and pay 0% interest on it. It is that easy.
Just how much you save will vary based on your interest rate, but on a $10,000 balance with a 16% interest rate you would be spending $150 a month on interest. If you make a $250 payment, your balance would only decrease to $9,900 even though you’d be $250 poorer. That is a slow road to years and years of debt.
Step 2: Pay Off As Much of Your Debt As Possible During The 0% Period
Once you’ve transferred debt to your new 0% card, every payment you make will go directly to paying off your debt. While it may be tempting (or even necessary) to reduce your monthly payment, the goal should be paying down your debt consistently and increasing payments whenever possible.
Below you can see the huge difference doing a balance transfer will make on your credit card debt. For this example, we used the Chase Slate credit card.
As you can see, consistently making $250 payments on a credit card with a regular interest rate doesn’t make much of a dent on your credit card balances. On the other hand, those $250 payments go a long way on a balance transfer card, wiping out more than 35% in just 15 months!
As you can see, opting to do a balance transfer is a no brainer decision that can literally save you thousands on interest. All you need to do is move your balance to one of the industry leading offers below to start saving.
Top 0% Intro APR Balance Transfer Offers:
Chase Slate® is the ideal choice because it offers a 0% intro APR for 15 months on purchases and balance transfers while charging no transfer fees as long you complete your transfer within 60 days of being approved (you can do it online when you apply so this won’t be an issue). The lack of a balance transfer fee provides huge savings, as most credit cards charge 3% fees. On a $10,000 transfer, this works out to $300. Paying that fee is much better than paying a regular interest rate that is four or five times higher, but it is obviously best to pay no fees at all.
BankAmericard® Credit Card
The BankAmericard® Credit Card is a product for consumers with excellent credit that offers a similar 0% APR for 15 billing cycles on purchases and balance transfers. Like Chase Slate, this card offers a $0 Intro Balance transfer fee during first 60 days of account opening. After that, the fee for future balance transfers is 3% (min. $10).
This card is available to consumers with excellent credit only.
Chase Freedom Unlimited℠
The Chase Freedom Unlimited℠ card is a good option for consumers who want to earn rewards once they’ve paid off their balances. Like Chase Slate®, it offers a 0% intro APR for 15 months on balance transfers and purchases. However, there is a balance transfer fee of $5 or 5% of the amount of each transfer, whichever is greater. A $150 bonus is offered to those who spend $500 on purchases with the card in the first 3 months of cardmembership. This can help offset the fee expense on a $5,000 transfer though, which makes this a good choice if you have a smaller balance.
Editorial Note: This content is not provided by the credit card issuer. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by the issuer.
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